A former technical manager at a company that was negotiating a consultancy agreement with Delimara power station contractor BWSC has been ordered to refund over €1.7 million for breaching fiduciary duties.

Joseph Mizzi worked at Associated Supplies Company Limited (AS) when negotiations were under way in October 2005 with Burmeister and Wain Scandinavian Contractor (BWSC), which sought consultancy services to bid on the tender for the power station extension.

Mizzi's role in the BWSC power station 18 years ago raised huge political controversy. Then Opposition leader Joseph Muscat had described the deal as "the most corrupt contract in this government’s history”. It was reported at the time that Mizzi was the local representative of a company which consulted for Enemalta on the award of the contract to BWSC for whom Mizzi also worked. Mizzi had been hauled before the Auditor General but was reported to have 'forgotten certain details',

Mizzi had been working for AS since 1989, providing technical assistance on important matters such as negotiating agency agreements and advising the board.

But after falling ill at the workplace and being rushed to hospital for emergency surgery, Mizzi requested to be boarded out.

A Social Security Department medical board gave its approval and Mizzi handed in his resignation letter.

The consultancy agreement between AS and BWSC was never finalised because the contractor insisted that the agreement would lapse if Mizzi were no longer employed by AS.

Associated Supplies refused to accept that condition.

But following Mizzi’s resignation, AS director Joseph Rizzo realised that their former employee was still pursuing the project, even writing about the power station in a letter to the editor of Times of Malta in November 2005.

Rizzo wrote to Mizzi, questioning that apparent interest but he never got a reply.

Then news emerged on local newspapers that BWSC had won the tender and that its agent was Mizzi.

Associated Supplies sued Mizzi for alleged breach of fiduciary duties in terms of article 1124A of the Civil Code, claiming that he had worked behind the company’s back to reach his goal of acting as personal agent to BWSC. He had exploited the “confidential, private and commercial information” he had acquired and put it to his own advantage.

After scrutinising the voluminous documentation produced in evidence, the First Hall, Civil Court, presided over by Madam Justice Anna Felice, observed that the crux of the dispute lay in what Mizzi did in the months after he was boarded out.

He first received a visit from a BWSC representative while convalescing, then “hurriedly” sought to get boarded out, mere months away from retirement.

That meeting with the BWSC representative was no “casual encounter” or “courtesy visit”, said the court. The fact that he got back in touch “did not happen by sheer coincidence”.

Mizzi “pounced” on the opportunity which presented itself when he fell ill, resigning from AS and, thus, ridding himself of any obstacle to act as personal agent to the contractor.  BWSC wanted to engage Mizzi at all costs because of his experience and technical expertise.

Such behaviour went against Mizzi’s fiduciary obligations towards his former employer and he now had to face the consequences, which included paying back the gains.

Mizzi told the court that he had been paid a one per cent commission on the Delimara project, which was valued at €165,000,000.

Although the court doubted that the one per cent rate was true, remarking that Mizzi had appeared reluctant when questioned about this, it had to base its decision on the documents presented.

The court declared that Mizzi had breached his fiduciary duties and ordered him and Typeset Limited to pay Associated Supplies €1,697,658.25 by way of damages, together with costs of the case.

Lawyer Claire Bonello assisted the applicant. Lawyer Adrian Camilleri also appeared for Associated Supplies Ltd